Importance of Organizational Structure to a Global Business.


Importance of Organizational Structure to a Global Business.


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No, I do not concur with the statement. Organizational structure is fundamental and crucial in a global business and even all other businesses. Organizational structures help a business to manage its changes in marketplace better. It is essential for decision making. A company can have either a tall or flat organizational structure (Knight & Cavusgil, 2004). In a flat organization, the front-line employees are allowed to make decisions. Here, Communications flows from bottom to the top, while in a tall organization, it is the managers who make decisions and a series of steps is taken before actions are implemented. Communication flows from top to bottom.

Organizational structure is crucial for communication. It enables distribution of power and authority. Any employee of a company is aware of what to do and where to report and to whom. This brings an excellent flow in communication and promotes better understanding. All the members carry out their responsibilities well and in harmony. Lack of the organization will lead to poor communication, misunderstandings, irresponsibility, and misuse of power.

Employee performance is better evaluated using the organizational structure. The seniors can better assess the performance of their subsidies using the linear structure of functional and product organization (Knight & Cavusgil, 2004).. Supervisors can evaluate the skills of their employees, the time they take to complete their work and how they relate with their co-workers. The supervisors then complete their performance appraisals that are compulsory for most organizations.

Organizational structure allows for achievement of goals and results because it gives a series of commands. The structure fosters teamwork in an organization, and every worker works towards a particular goa (Knight & Cavusgil, 2004). l. The supervisors give and divide work among their subordinates who work under certain time deadlines. This boosts the performance and production of a business organization, and lack of the structure could lead to a market failure.

Poor or lack of organizational structure results in unnecessary ambiguity, confusion and lack of accountability. Lack of coordination among roles, lack of sharing ideas and slow decision-making causes stress, complexity, and conflicts among the managers and leaders of an organization. Therefore, a global business organization cannot be successful without a proper organizational structure.




Knight, G. A., & Cavusgil, S. T. (2004). Innovation, organizational capabilities, and the born-global firm. Journal of international business studies, 35(2), 124-141.


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